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B) Sum up the text in 5-6 sentences and present your summary in class.

Endorsements and Exclusions

Endorsements add coverage to your policy and exclusions take away or limit coverage under your liability policy. We will address various types of exclusions and endorsements applicable to the liability policy. Here, we will briefly list the most common types of endorsements:

Liquor Liability-This is an endorsement to your liability policy adding coverage if your business sells, serves, produces, distributes or facilitates the delivery of alcohol to the public.

Employment Practices -As the population ages and as our workplace becomes more diverse, claims against employers alleging discrimination are increasing. This endorsement adds coverage for such claims subject to a number of limitations.

Employee Benefits -If you or an employee will manage employee benefits such as health, 401k's or pensions, then this endorsement will add coverage to protect you against claims of faulty administration or negligence.

Liability Insurance is a critical element of your business insurance plan and it can be complicated. Choosing a good insurance professional and creating a statement about what your business does so you can work with that professional to understand your options is important in making sure your liability insurance is an adequate part of your business insurance plan.

Words you may need:

error –помилка

casualty insurance –страхування від нещасного випадку

to eliminate –усувати, знищувати

claim –позов, претензія

apparent –явний

occurrence –випадок, подія

resolve – наважуватись

aware –обізнаний, інформований

exposure –наражання (на ризик, небезпеку)

inhalation – вдихання

pit –кар’єр

pollution –забруднення

negligence –недбалість, халатність

4. a) Read the text to find answers to the following questions:

- Why is it necessary to have workers’ compensation?

- How do premiums depend on the claim experience of the particular industry?

- What must be considered first in a properly constructed business insurance plan?

WORKERS’ COMPENSATION INSURANCE

If your business has employees, you will need workers’ compensation insurance.

Workers’ compensation is a system set up by the state to insure all employees in the state in case of a work place injury. Under common law, the master (employer) is responsible for the injuries that occur to their servant (employee). Before workers’ compensation an employee could sue an employer for their injuries on the job. The employer could defend against the suit by showing the employee was negligent or not doing their job at the time of the injury. Understandably, this system led to a good deal of litigation – none of it benefiting workers, their families, or their employers.

Over time, states set up a system of insurance where all employers were required to participate and in return employees were no longer entitled to bring a law suit for their injuries. Instead, employees submit claims to the insurer and the claims are paid.

By law, you will be required to participate in workers’ compensation. There are exceptions, but the exceptions are few. The exceptions also differ by the state you do business in. As a general rule, if you are self-employed, you do not need to have workers’ compensation insurance. However, you can “opt in” as a self-employed business person.

When you start in your business your premiums will be based on the claims experience of your particular industry. Claims experience is a historical set of data kept over time which statistically predicts the number of injuries (claims) that are likely to occur in an industry. The roofing business and construction contractors typically have the highest claims experience and workers’ compensation premiums are higher for those businesses. Businesses where there is less chance of injury have lower premiums.

After a few years your business will be rated on its claims experience. Typically this rating process will penalize your business with higher premiums for higher than average claims and reward your business with lower premiums for lower than average claims.

Most states also have voluntary employer training/safety programs that can lower premiums. Some states allow businesses to become self-insured by retaining private insurance outside of the workers’ compensation scheme.

If you will have employees, you will need this insurance by law. In a properly constructed business insurance plan, the premiums for workers’ compensation insurance should be considered first and a budget for premiums for other types of insurance considered only after this legally mandated insurance is considered.